This article is from the Australian Property Journal archive
DEXUS has continued its potentially $2 billion run of major divestments during the pandemic, offloading the A grade 60 Miller St tower in North Sydney for $273 million at a premium to book value.
The off-market sale to Hong Kong investor Huge Linkage is at a 3% premium to the June 30 book value. Sale proceeds will initially be used to repay debt.
Built in 1987, 60 Miller St is a 17 level, A grade office tower with ground floor retail across 19,350 sqm. The property is 97% occupied with a weighted average lease expiry of 3.5 years. Covermore and Flight Centre are among the key tenants.
The sale followed receipt of unsolicited offers, Dexus said. Settlement is subject to FIRB approval and is expected in mid 2021.
“This transaction reinforces private market demand for quality office assets in Australia’s gateway cities,” Dexus chief investment officer, Ross Du Vernet said.
“The sale improves portfolio composition and enables us to organically fund growth in our development and funds management businesses, while preserving capacity for further capital management initiatives.”
Australia’s largest listed office landlord sold the 45 Clarence St office tower in Sydney for $530 million in the middle of the year – that deal was also the result of an unsolicited offer, and was in line with book value – and more recently the its wholesale property fund netted more than $450 million from the sale of 452 Flinders St in Melbourne, representing an 11% premium to June’s book value.
Dexus is also reportedly in late-stage talks with China Investment Corporation to offload a half share in Grosvenor Pl in the city for about $1 billion, and is shopping around a share in the 80 Collins St precinct in Melbourne that it splashed out nearly $1.5 billion for in 2019.
In its recent quarterly update, Dexus was a little more optimistic about the commercial property market “with most lead indicators up”. It had said in August it was expecting office vacancies to rise in the major CBD markets as the pandemic forces businesses to reassess their use of floorspace. Sydney organisations looking to cut costs and decentralise their workforces as a result of the pandemic are tipped to find new homes in the Parramatta, North Sydney and Macquarie Park markets.
In recent weeks Dexus took another major step in the healthcare property sector, joining forces with its Healthcare Wholesale Property Fund to acquire the Australian Bragg Centre in Adelaide for $446.2 million.
Last week, it secured retail behemoth Amazon for a new 37,000 sqm fulfilment centre to be built at a Dexus managed Horizon 3023 industrial estate in the western Melbourne suburb of Ravenhall. It is expected to be worth up to $70 million.
